URP584 Economic Development Planning (Prof. Campbell, University of Michigan)
URP584 Economic Development Planning (Prof. Campbell, University of Michigan)
To engage and illustrate our discussion of Sports and Economic Development, please post examples: e.g., funding of stadiums or sporting events, economic impacts, competitions between cities for teams, Olympics, the World Cup, the Super Bowl and other events. I encourage a wide variety of examples from around the world, from permanent teams to one-off events, and both professional and amateur sports (including college sports).
Instructions for students: everyone registered in URP584 has editing access to this document; be sure to sign in (using your UM account if you are not already signed in). Click "Publish" when done. Format: be sure to give your entry a simple title, a comment (where appropriate), and your name.
Brief entries are fine, such as an image, an article link or a quote; please list all sources. To see more examples from past years, click here. Thanks! Scott Campbell
photo credit (above): "Crowd at Cubs Park, July 27, 1929" (Library of Congress)
The Superdome, home of the New Orleans Saints, was considered a struggling stadium in the early 2000s, and the team was considering a move to a different stadium or a different city. However, in 2005, when Hurricane Katrina struck New Orleans, the Superdome served as a refuge for over 16,000 residents who had lost their homes. In the aftermath of Katrina, renovations of the Superdome helped it keep its sports team and represented new investment for a city that has been struggling economically. Renovations included the replacement of its exterior skin, a state-of-the-art video messaging board, and remodeled concession stands, among other improvements. The Superdome will host the Super Bowl in 2025, potentially bringing 125,000 visitors to the City and $500 million in economic impacts to the State.
References:
While I can't find any articles criticizing the new athletic campus, I feel as a student-athlete that the project is EXCESSIVE. Necessary facilities already exist and are not in poor condition, they could use a small update at most. Instead, the athletic department chose to double everything. I already have a weight room, a meeting room, and a track. The expansive project does not even include the few things that are needed, such as a cafeteria (athletes currently eat in the hallways of Yost ice rink) or a larger study center. While the project does not directly take away funds from the university, it saddens me to see that such a large sum of money would only benefit a small-minority of students (about 850). I believe that the project was partially due to Title IX- the university has lavish facilities for football and basketball, so they are required to provide similar amenities to female counterparts.
Project components:
280,000 square feet
$168 million
All funded through donors (plus $100 million from Stephen Ross)
900 Parking Spots
While they highlight some sustainability components, is more construction more sustainable than existing facilities? Also, the new complex is a mile further away than the original.
References:
In 1984, Baltimore Colts owner Bob Irsay moved the team from Baltimore to Indianapolis "under the cloak of darkness." Mayflower moving trucks lined up outside Memorial Stadium and moved the equipment to Indianapolis. Colts fans and government officials were devastated.
Prior to the move, Irsay had been looking at other locations because he wanted a new stadium but the government did not want to help pay for one. In fact, because of Irsay's antics, the Michigan State Legislature tried to seize the team through eminent domain. This conflict caused Baltimore to lose the Colts and allowed the other teams to gain leverage in stadium development. In 1989, the owner of the Balitmore Orioles discussed moving the team as well because of dislike of the same stadium. The Maryland State Legislature had no choice (because of the often political suicide when losing a team) but to help fund the Camden Yards, the new stadium for the Orioles
This is an interesting story because it relates to two cities: Indianapolis who's mayor at the William Hudnut lobbied for the development of the Hoosier Dome to lure the Colts, and Baltimore, a city that has often been indebted to owners because of the move of the Colts. The impact of this case is very present in many stadium development conflicts.
Picture: http://www.ballparks.com/baseball/american/memori.htm
http://explorepahistory.com/kora/files/1/2/1-2-13D4-25-ExplorePAHistory-a0l0r3-a_349.jpg
Between 1994 and 2015, Los Angeles, the second largest city in the United States and arguably the entertainment capital of the world, had no NFL teams. The Rams, which had called Southern California home for the better part of 50 years, relocated to St. Louis because of the construction of the Trans World (Later Edward James) Dome downtown. However, Stan Kroenke, the owner of the Rams, soon tired of losing in an antiquated stadium in a smaller television market, they soon tried to convince the city of St. Louis and the State of Missouri to build a new stadium. After not reaching a compromise for renovation of the Dome, Kroenke decided to move the Rams to the Los Angeles Memorial Coliseum as he builds a stadium (pictured) in the West LA suburb of Inglewood.
In San Diego, Dean Spanos, the owner of the Chargers, decided to move 100 miles north on Interstate 5 after failing to secure public funding for a new stadium. Although Qualcomm Stadium, the team's home for many years, was one of the oldest stadiums in the NFL, it was nevertheless home to one of the most loyal fan bases. However, Spanos rejected a $650 million offer from the City for a new stadium in 2016, and announced that the team will play in a soccer stadium (the StubHub Center, capacity: 30,000) in suburban Carson for the upcoming two seasons. They will move into the Rams' stadium in 2019, as a tenant, when it is completed.
What is very interesting is that, although Angelenos, for the most part, welcomed "their" team (the Rams) back home, sportswriters and the public disapproved of the Chargers' arrival. For example, Bill Plaschke, a sports columnist at the Los Angeles Times, started a column that "[e]very relationship is built on honesty, so the San Diego Chargers should hear this as their moving vans are chugging up the 5 Freeway on their noble mission of greed. We. Don’t. Want. You." Evidently, although the sports fans of Los Angeles were ecstatic at receiving their old team again, and not having to pay for a stadium to boot, they were still weary about gaining two owners whose greed and ego were astronomical even for the City of Angels.
Sources:
Rams: https://businesssideofsports.com/2016/02/09/3-reasons-why-the-saint-louis-rams-moved-to-los-angeles/
Plaschke column: http://www.latimes.com/sports/la-sp-chargers-move-live-message-to-chargers-we-don-t-want-you-1484238023-htmlstory.html
Image: http://mynewsla.com/wp-content/uploads/2016/05/inglewoodstadium-640x360.png
Olympics, the honor or the Shame
Yuren Chen
Hosting the olympics game is the dream of all countries, but is that a good one or not?
Rio 2016
Chaos in government. "Rousseff said in an interview with Radio France Internationale broadcast on Monday that she did not intend to take part in the Olympics in a 'secondary position'." Huge deficit.
Olympic development raised social tension. "A series of mishaps and near-misses included stray bullets, robberies, an attack on a media bus, serious crashes in the cycling road races, empty seats, booing crowds, broken toilets in the Athletes' Village and a pool mysteriously changing color." ... polluted water sports venues and the outbreak of the Zika virus. You may be killed.
Private-Public Partnerships (PPP) may have bad influence in the future. "PPPs mean that private construction firms are footing 60 percent of the bill for Olympic construction projects. While it saves public money, the construction firms are then able to develop the land for profit. "
A jaguar has been shot dead shortly after it was used in an Olympic torch. The female jaguar escaped its handlers after the ceremony on Monday and attacked a soldier, a spokesman said
resources:
Grace Cho
In a past life, I used to be a pretty big baseball fan. Now, I am an aspiring urban planner interested in the relationship between people's lives and the built environment (and am rather bemused by the furor caused by sports). I want to compare two examples of famous baseball stadiums where things got demolished in rather different ways. The development of both stadiums - the new New York Yankee Stadium in 2009 and Los Angeles Dodgers Stadium in 1962 - reflect the gradiose spectacle of modern sports, as well as the wastefulness that this extremely lucrative industry creates in the name of entertainment.
"The House that Ruth Built" - The original Yankee Stadium was built in 1923. Names that even a sorry-excuse-for-a-sports-fan like myself would recognize - Babe Ruth, Lou Gehrig, Joe DiMaggio, Derek Jeter - played baseball in this storied place. History buffs and baseball fans alike could appreciate the sense of awe encapsulated in the stadium. And then they demolished it. "They," being the owners of the Yankees. A new stadium was built across the street. I remember when it happened, wondering if there was something structurally wrong with the old stadium. There wasn't. The Yankees just wanted to build a bigger, "more modern" stadium. After the demolition, the site of the old stadium was converted into a park, to make up for the parkland lost by building the new one.
Chavez Ravine - Located a few miles away from downtown LA, Chavez Ravine was home to an idyllic Mexican American community for years. In 1950, the enclave was chosen as the future of site of federally-funded public housing. Homeowners were told they would have to leave, and were given the option of living in the new units. Some resisted and were removed, while others moved away. Very few residents received adequate compensation for the loss of property. The federal government acquired the land through eminent domain. Some properties were sold, auctioned off, or set on fire for the local fire department to practice. Plans for the housing project were stalled by allegations of communism toward public housing. The assistant director of Los Angeles City Housing Authority, Frank Wilkinson, was arrested and imprisoned for a year. A new mayor ran on a platform to kill the public housing project, won, and purchased the land back from the federal government at a reduced price. A series of controversies, and, in the end, a local referendum approved the stadium. A few remaining families were finally removed from Chavez Ravine, which was completed in 1962. Although the locals love the Dodgers, the stadium still stands as a symbol of the displacement of Latinos, which arguably continues to occur through gentrification.
https://en.wikipedia.org/wiki/Yankee_Stadium_(1923) [sorry for the wikipedia]
http://stuffnobodycaresabout.com/2011/06/08/the-original-yankee-stadium/ [a nostalgic and rather snarky blog post, complete with historic pictures]
London Stadium was originally built for the London 2012 Olympic Games as the main stadium where the opening and closing ceremonies including the track & field events. As part of the Games' legacy, the bidding committee guaranteed the continued use of the stadium by allowing one of the London teams to relocate to the stadium. In fact, the continued use of the stadium was a process that began before the games with two teams competing for the use of the facility [1]. This process included reducing the stadium's capacity from 80,000 during the games to 60,000 (originally planned to be 54,000[2&3]). The bidding warfare between the two teams (West Ham United and Tottenham Hotspur) was not without controversy as allegations by the suggested misdoings in the process [4]. Other problems were raised by the EU and their concerns over State Aid and the EU's State Aid Law. The law in general states that public financing should not provide a private entity with a competitive advantage unless justified that the financing was not directly serviced to do so (hence stadium financing for international tournaments is permitted even if teams play in those facilities after the tournament is finished [5].
[1] http://www.queenelizabetholympicpark.co.uk/media/press-releases/2011/2/statement-on-the-stadiums
[2] http://www.bbc.com/news/uk-17905304
[4] https://www.theguardian.com/sport/2013/nov/08/west-ham-olympic-stadium-bid-three-admit-spying
http://www.dailymail.co.uk/sport/olympics/article-2115281/London-2012-Olympics-Olympic-Stadium-Guide.html
Many criticize Bloomberg for supporting the development of both Citi Fields (formerly Shea Stadium) and Yankee Stadium because it exhibited an overestimation of the strength of New York's local economy. Both stadiums required a strong contribution by taxpayers, through the selling of bonds and finding loopholes in "property ownership."
For Yankee Stadium, "the city found a loophole by structuring the deal in a way that had the stadium pay off the debt service through payments in lieu of real estate taxes (or PILOT payments) as opposed to rent," which ended up costing the city nearly 2 billion dollars. There were also community benefits agreements attached to it, which included housing, a new ballfields public park, and more enriched community programming (the housing as yet to be built as of 2015).
For Citi Fields, "The NY Mets completed financing for Citi Field on Wednesday by selling $82.28 million in tax-free bonds of up to 37 years at what Citigroup said was an average interest rate of 6.45 percent," for a stadium costing around 800 million dollars. There were no clear community benefits agreements associated with the redevelopment of Citi Fields, partially because of its location.
Both projects were considered to reinforce the strength of the market confidence to support both the ballpark projects, which were planned to open on the same day, April 3, 2009. However, community input was thoroughly ignored for both projects, giving the financial entities the stronger advantage with tax breaks, tax exemptions, property tax abatements, but tons and tons of taxpayer money. The final cost for the two stadiums was more than $3.1 billion; taxpayer subsidies accounted for $1.8 billion.
Sources:
https://therealdeal.com/2016/08/26/yankees-seeking-1-04b-refi-for-stadium/
http://bleacherreport.com/articles/59454-the-new-and-controversial-yankee-stadium
Ujijji Davis
A controversial stadium from the very beginning, FC Cincinnati finally found its home in West End. A lower income neighborhood of Cincinnati, Ohio. The process took longer than expected, and issues over zoning and land deals kept cropping up. The stadium itself is very close to a school, and the deal was made with the Cincinnati Public School District and City of Cincinnati. They are taking over the space that was Taft High School's football stadium. Through negotiations, the school is receiving a new $10 million football stadium, the stadium is funding $6.2 million in neighborhood improvements, and $25 million went to Cincinnati Public Schools for the land use agreement.
The stadium is using funds from a TIF district and some other funding from the county and state. There was pushback from community members who called for a Community Benefits Agreement but the City Council passed the construction plans using an emergency ordinance.
One of their primary claims to fame for this stadium is that it will be one of the world's largest Major league soccer-specific stadiums. Cincinnati is now a finalist for hosting the 2026 World Cup. The stadium is set to open in 2021.
Resources:
https://www.fccincinnati.com/west-end-stadium
https://radio.wosu.org/post/fc-cincinnati-stadium-closer-approval-issues-remain#stream/0
https://www.si.com/soccer/2018/04/06/cincinnati-mls-expansion-stadium-detroit-sacramento
When the Dallas Cowboys stadium was built in 2009, the project drew controversy for its use of public funds and its location in the City of Arlington, rather than Dallas.
It was financed heavily by the City of Arlington with $65.3 million in municipal bonds. The stadium is one of the most expensive stadiums built with a construction cost of $1.3 billion, and Cowboys were the most valuable NFL franchise (by revenue). Opponents of the public subsidies, such as Jerry's World and the No Jones Tax Coalition called the stadium "a use of government funds to subsidize activity that the private sector can finance on its own" (Heidrick 2013).
In 2015, media indicated that Arlington was paying down its debt faster than expected due to tax revenue from sales, hotels, and car rentals. The City of Arlington had paid 40% of the debt by 2015, potentially paying off the stadium debts 10 years early. Interestingly, the City owns the AT&T Stadium, not the NFL franchise, and the Cowboys owner pays rent to the City each season. Rent and naming rights also contribute to paying down the debt.
In the ongoing debate of whether new stadiums also prop up surrounding local businesses, professors at UT-Austin studied the AT&T Stadium as a case study of how local businesses respond to change. The study found that businesses that engaged in "temporal adaptation" (changing business hours to match activity) did better than those who didn't. This also correlated with the mindset of business owners -- those who saw the stadium as a threat were more resistant to adapt.
https://nextcity.org/daily/entry/sports-stadiums-economic-development-business-impact
https://www.star-telegram.com/news/local/community/arlington/article10754984.html
Built for Detroit's professional hockey and basketball teams, the Little Caesar's Arena has been controversial since Olympia Entertainment announced its construction in 2012.
The stadium was built using a mix of private and public funding from a city that exited bankruptcy in 2014. The stadium's final cost was approximately $862.9 million, $324 million from public funding.
https://www.nytimes.com/2018/01/19/business/sports-arena-development.html
Posted by Andre Monge.
Germany has long history of being involved in motor racing, starting way back in the interwar period in the 1920s, so it was only natural when a European championship for motor racing began, Germany would play host to one of the races on the calendar. The first track to play host, the Nürburgring in the town of Nürburg, was built in 1927 and took 40 million Reichsmarks to build, approximately $40 million dollars in today's money, in a joint effort between private owners and the government at the time. Post World War II, once West Germany was allowed to participate in international sporting events once more, the circuit played host for the German Grand Prix for the early Formula 1 calendar. It was largely funded by sponsors at this point in time, as successful German drivers throughout the years kept interest alive in the country, so it was profitable business venture, even into the early 2000s with the success of the German Michael Schumacher. However, due to safety concerns, and therefore, lack of sponsor funding who didn't want to be associated with the "dangerous track," the event was moved to Hockenheim with its appropriately named Hockenheimring. Starting in the '70s, the Hockenheimring was the new home for Formula 1 in Germany, and as a result, new investment in the town of Hockenheim, just like in Nürburg before them.
However, now in the modern day, lack of public interest in Formula 1 in Germany has waned due to no outstanding German drivers in the championship, with grandstand attendance year by year, and as such sponsor funding has been decreasing ever since 2005, causing the circuits to run at a loss to hold the event. Inter-regional investment has gone down in the two towns (which alternated being host of the event since 2007), and despite promises from Formula 1 Management (FOM) promising to subsidize the event themselves, lack of local and federal support in Germany led to the German Grand Prix being stopped altogether in 2019, with no new event since then. Despite the millions of euro that have gone into modernizing the circuits for modern Formula 1 standards, neither the owners and locals of the two towns see any income anymore from these events, running at detrimental losses even in other motorsport championships. Without any federal support, it is unlikely that the German Grand Prix return and seasonal tourism reach the peaks of the late 1990s and early 2000s that Hockenheim and Nürburg experienced.
Sources: https://www.gpblog.com/en/news/102536/f1-back-at-nurburgring-only-on-sensible-financial-terms.html
https://www.caranddriver.com/news/a15128233/10-nurburgring-facts-revealed-car-news/
https://www.racingcircuits.info/europe/germany/hockenheimring.html#.Yg5zXOjMKUk
Northern, New Jersey
Abby Johnson
The Meadowlands Sports Complex is a large compound that includes MetLife Stadium, Meadowlands Racetrack, and the Quest Diagnostics Training Center. New Jersey wanted to build the Meadowlands in order to have a home for a professional football team in the state. According to northjersey.com "The Meadowlands Racetrack opened Sept. 1, 1976, before a recorded crowd of 42,133 — a figure that does not reflect the thousands more who knocked down temporary fencing in their exuberance to bear witness to the debut of the first venue to open at the Meadowlands Sports Complex." Unfortunately, the Meadowlands no longer has the same draw for fans because it is no longer the home base of teams such the Nets or Devils. Losing those teams has had a significant impact on the ability of the Meadowlands to maintain profitability in recent years.
Sources:
https://en.wikipedia.org/wiki/Meadowlands_Sports_Complex
https://www.co.bergen.nj.us/entertainment/meadowlands-entertainment-attractions
Coors Field In Denver, CO
Megan Wakefield
Image: Megan Wakefield
Coors Field opened in 1995 in the Lower Downtown (LoDo) neighborhood of Denver. While the neighborhood had for a long time been home to commercial and retail, it was also home to crime and blight in the early 1990s. Like many other sports arenas, advocates for Coors Field claimed it would provide a favorable economic impact at the time. The construction of the field was largely financed by taxpayers (Taylor, 2013).
Around Coors Field, there are now many bars, restaurants, apartments, condos, and retail. It's stated that the Colorado Rockies are the biggest economic contributor of all the sports teams in Denver, including the Denver Broncos, the Colorado Avalanche, and the Denver Nuggets. In the "Accounting for Sports" article by Mike Taylor, he states that developers believe Coors Field was the catalyst for change in downtown Denver. Taylor included that the neighborhood saw a 61% increase in population between 2000 and 2011.
In light of this economic impact from Coors Field, it was expected that the All-Star game held in Denver in July of 2021 would bring in a lot of money. It was a big event for the city and for baseball fans, especially since it would be an opportunity to gather in person since the start of the pandemic. Given the economic impacts of the pandemic, the number of people in Denver experiencing homelessness significantly increased, and many chose to stay on the streets of LoDo. During the months prior to the All-Star game, LoDo saw more homeless encampment sweeps, and the timing of them could not be ignored. Though the mayor denied the sweeps were tied to the upcoming All-Star game, many homeless advocates argued that the city was trying to push the homeless population out of downtown (Cooke, 2021). Many relocated to neighborhoods further from LoDo, and it took months for them to move back to downtown after the game.
In the end, bar and restaurant owners around Coors Field claimed that they did not see the business they expected to around the All-Star game. Many expected to be as busy as they would be on opening day, but that was not the case (Mulholland, 2021). While this serves as an example of a sports field not living up to its projected economic impact, I do think that over the long term Coors Field has been successful in providing some economic benefits to downtown Denver, though those benefits have quite literally been at the expense of residents.
https://history.denverlibrary.org/news/building-ballpark-neighborhood-karle-seydel-papers-0
https://www.cobizmag.com/accounting-for-sports/